BANGKOK — Myanmar has an apparel sector rife with human rights and labor violations that need to be addressed urgently as it rapidly grows more popular among major international brands, according to a report from the Netherlands-based Centre for Research on Multinational Companies.
Since the country opened up in 2011, its garment industry has undergone significant growth, with exports hitting $1.46 billion in 2015. The union movement — previously nonexistent when the country was ruled by a junta — is still nascent, while the government has enacted a minimum wage of $2.64 a day to address the concerns of an ever-expanding population of factory workers. Today, more than 350,000 workers work in Myanmar’s factories, but the manufacturers association estimates that the workforce will grow up to 1.5 million people by 2024.
Working with two Myanmar labor rights group, the Centre for Research on Multinational Companies, known as SOMO, has produced a report titled “The Myanmar Dilemma” that focuses on 12 garment factories in the country. Interviewing more than 400 workers over a five-month period last year, SOMO has highlighted problems within Myanmar’s burgeoning garment sector that is seen repeatedly in many low-wage garment producing countries, and the researchers hope to offer suggestions “to head off a crisis before it escalates.”
“This rush to invest is fraught with perils when it comes to a fragile democracy like Myanmar, where more than a quarter of the population lives in poverty,” the report said. “There is still an opportunity to make sure that Myanmar is not the next Cambodia or the next Bangladesh, low-wage garment-exporting countries where working conditions are notoriously hard and unsafe.”
Some of these problems will seem extremely familiar. An example is the absence of permanent contracts — seen as a sign of employment stability — throughout the industry: Workers in six of the 12 factories said the majority of the workforce did not have contracts, while four of the factories were just hiring workers on a daily basis, making them ineligible for bonuses or benefits.
Meanwhile, those working on a daily basis did not also receive the legally mandated wage of 3,600 kyat a day.
“Some interviewed workers described how helpers who were regularly employed were downgraded to daily laborers after the implementation of the minimum wage law,” the report added. “They said that a considerable number of workers are hired on a daily basis. These daily laborers earned 2,000 kyat [$1.47] a day.”
In addition, factories were keeping their workers on an “apprentice” wage. “Factories are clearly abusing the apprenticeship and probation provisions of the minimum wage law, as workers who start their employment at a factory are hired at apprentice wages regardless of experience.”
Meanwhile, if a worker fell ill, her daily wage would be deducted. If she took the day off without notifying the management, 8,000 kyat — more than two days of the daily minimum wage — would be deducted, thus rendering medical emergencies to be a struggle between their health and their livelihoods.
“One of my colleagues got an eye injury. The needle broke and got into her eye,” one worker said. “She had to take a day of sick leave because of the eye injury. Two days of wages were deducted from her salary.”
Other issues included excessive overtime hours (logged consistently to combat the need for a higher salary), an absence of training when it came to health and safety precautions in five factories, and a general lack of awareness about their rights as workers and their right to unionize — all problems that are commonly seen in low-wage garment-producing countries like Bangladesh and Cambodia.
Another problem that cropped up in all 12 factories was the hiring of underage workers, some of whom were below 15, though the hiring frequency of these minors was difficult for researchers to ascertain. Myanmar, being a country with a high poverty rate, has had a long battle with child labor, and kids as young as 10 can be seen working everywhere, from brick-producing kilns to a local teashop.
To allow the retailers to respond to these allegations of human rights violations, SOMO reached out to them, and received a reply from nine of them — including H&M, Primark, C&A and Muji. In parsing the responses, SOMO acknowledged the irony of these companies’ engagement and transparency, which may sometimes invite more criticism.
“Actors that share information and are willing to discuss their policies, practices and plans…get more attention, and not always necessarily in a positive way,” the report said. “Those actors that hide and remain silent seem to remain under the radar.”
The brands that did not respond included London-based boxing clothing brand Lonsdale, British sporting goods retailer Sports Direct, the New York-based Levy Group, and French retailer Pierre Cardin.
SOMO’s researchers said that besides having stronger labor legislation and good rule of law, retailers and manufacturers investing in Myanmar have an immense role in a country with such a fragile democracy.
“Companies operating in this environment have a greater responsibility than usual companies,” the report said. “These companies must apply due diligence and act with much greater care in situations of fragility and conflict, beyond usual corporate compliance.”
Ulrika Isaksson, a spokeswoman for H&M, which sourced from three of the 12 factories in the report, reemphasized the company’s commitment to strengthening workers rights and ensuring safe working conditions, adding that SOMO’s report raised “industry-wide challenges” that H&M has been tackling for many years.
She said that while all their suppliers are required a minimum wage, H&M wants to aim for their suppliers to provide a fair living wage, which would cover the basic needs of a worker and her family, while providing some leftover savings. This can only come with an inclusive dialogue amidst all the players of the garment supply chain.
“We firmly believe that improved social dialogue and industrial relations — where freedom of association is respected, where workers’ representatives have a voice and where trade unions can negotiate and bargain collectively — are preconditions for lasting improvements for the garment workers…and also for stable production markets,” Isaksson said.